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Facebook Permitted to Continue Enforcing Real-Name Policy in Germany

By Evan Niu, CFA - Apr 23, 2013 at 5:15PM

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Facebook gets cleared to continue enforcing real names in Germany, following a regulatory dispute from December.

Following a regulatory order in Germany from December forcing Facebook (FB 1.18%) to allow users to use pseudonyms (in direct conflict with its real-name policy), German courts have struck down the prior decision and sided with the social network. German privacy laws allow for Internet users to use nicknames and pseudonyms.

Administration courts had previously sided with Facebook in February, and today's decision further discredits the regulatory scrutiny. Since user data is not processed through Facebook's German subsidiary, which primarily conducts marketing and sales functions, it is not subject to the German privacy law. Facebook's European headquarters is in Ireland, making Irish law applicable.

Courts did not find that Irish law contained the same provision for pseudonym usage. Facebook frequently disables accounts for which real names are not used. As of the end of 2012, Facebook estimated that 7.2% of its total monthly average user base was composed of duplicates (5%), user-misclassified (1.3%), and undesirable (0.9%) accounts.

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